Energy bills set to rise as National Grid given £22bn makeover

Household energy bills will rise by an average £15 over the next ten years owing to investment in electricity and gas networks.

£22billion will be invested in electricity and gas networks (Picture: Reuters)

The £22billion of work, which includes laying undersea cables and maintaining gas mains, will ensure our power network remains among the most reliable in the world and will create 7,000 jobs, said industry regulator Ofgem.

However, it means average domestic bills will rise by £7 next year and by up to £15 by 2021 to pay for the investment, which is still subject to consultation.

National Grid said the proposals do not allow it to put up its charges by enough to encourage the investment needed in infrastructure.

It wanted to spend £21billion on electricity transmission in the eight years from 2013 in order to connect new power plants across England and Wales and £9billion on gas pipelines.

Ofgem is understood to be driving a hard bargain with National Grid because it wants to keep prices down for consumers.

A National Grid spokesman said: ‘We believe that these initial proposals will not appropriately incentivise the essential investments necessary to provide safe, reliable networks for the UK consumer and avoid delays to the achievement of the UK’s environmental targets.’

Ofgem chairman Lord Mogg added that the infrastructure replacement was unprecedented but despite the timing of it, investment was still a possibility.